What do Carnival Barkers and Diet Pills have in common? They both sell you something.
I took my sons to our local summer carnival a couple of weeks ago. We had a great time. None of the rides have really changed. They rode the same motorcycles I rode when I was their age. The same fire truck. The same roller coaster. The same giant slide. It was great. Classic Americana, a wholesome good time.
Of course, in-between the rides & good times, there are the Carnival Barkers.
And when you’re five, who cares that the stuffed banana you just won cost 50 cents for 5 dollars worth of basketballs. You won. You have the trophy to prove it.
Personally though, I have a hard time with my kids playing the games. I’ve done the math. I suppose I’m a grinch. I haven’t really gone into great detail about Santa, so at least I can point to that as something I’m doing right.
But what is a reasonably sane person supposed to do in the face of such a blatant farce? Let another generation get sucked into the promise of stuffed bananas, that will end up in their trash heap in two months?
And yet here we are, grown adults handing our money to Carnival Barkers, in the stock market. I use Google Finance. I use Yahoo Finance. I see those ads on the front page. The promise of 6% a month in just 10 minutes a night. Buy Your Gold because Glenn Beck endorses it. Investing tips for the coming doomsday. The reverse mortgages. The life insurance. The free newsletters, The SAME PORTFOLIO AS TALKING HEAD. Do You Have $500,000? Order now and get my free pitchbook. Did I mention I’m on Forbes?
(but seriously, Forbes–I ‘d totally write for you)
Can you imagine the impressions those ads get each day? Especially the down days. Oh, the desperation.
The newsletter business, alone, is at least a billion dollar industry here in the states. Those ads aren’t cheap. And I just cringe. The titles are laden with “Advisor” or “Capital” or some other intimating adjective. It’s not actually advice of course, it’s more like a buy/sell suggestion. A stuffed banana, that you can win sometimes.
Selling the drug of the win.
So, where is the FDA of investments? Or all of these claims outside of their purvey? Are newsletters & subscription services somehow the diet pills of the industry? A simple one line disclaimer at the bottom about how ‘no claims have been reviewed for efficacy’ and they’re all set? Ready with the next hangover cure full of caffeine & herbal diuretics. Isn’t the SEC supposed to protect the investor?
How is it, that good and decent advisers, who happen to decide to take the high road & subject themselves to scrutiny, with career risk behind every decision & comment made can’t so much as tweet I heart google, without anything less than four different levels of tracking & disclaimers? (I own google btw– see disclaimer). Don’t you think my clients & friends will leave me if I’m bad at my job? Won’t people unfollow me? And block me like spam? And all the while, Joe Money has five LLCs over there practically guaranteeing ten baggers on the back of some washed up talking head. Or manages billions and then it’s a ponzi scheme. How does that work?
My LinkedIn profile? Oh, nooooo… A client wrote an unsolicited comment like, “he’s truly commited to transparent advice & listens” or “he cares” or “I like that he uses XXX firm”… Nope– NO endorsements. Is that advertising? I suppose. Actually I hope not, I need to fill out a form for that. But wouldn’t that same person say the same thing at a party to another one of my friends too? Maybe even at a party I threw. That’s a form too, right?
And 30 years from now, when no one complains, and my clients & friends are sitting at my funeral and I have terabytes of forms, we can say the SEC served us well. The regulation obviously prevented mishap. No “banana in the tailpipe” shenanigans here.
I dunno. I guess we just keep letting the kids grab the bb-machine guns, shooting for the stars. Right?